Because my husband and I created our family’s budget based on Dave Ramsey’s teachings, I have wondered what life was like for his children.
In Smart Money Smart Kids, the book that Ramsey says was 20 years in the making, he and his daughter Rachel Cruze lay out a plan for parents based on her life growing up as a “Ramsey kid.”
When she was just 15, Cruze started speaking in public with Ramsey, joining his crusade to help people handle money wisely.
As an adult she appears in his Financial Peace University series and at events throughout the country.
There is one notable difference in her emphasis, though.
Instead of encouraging people to get out of debt, she wants to make sure they never get into it in the first place.
I spoke with Rachel Cruze between stops on the Smart Money Smart Kids book tour.
MintLife: Why do you counsel parents that money is something you must teach your kids about just like you teach them to brush their teeth or get dressed or all the other normal parenting things?
Cruze: Teaching your kids about money is a toolset that they have to have in life because you don’t really have an option as a parent.
Either you teach them how to handle money or money is going to handle them, literally, for the rest of their lives.
So being able to give them a strong foundation to go on their own, that’s just part of being an adult.
MintLife: In the book you suggest a few very visual ways to help children learn about money, such as crumpling bills up to look bigger in their savings jars. Why do you feel that is especially helpful for children?
Cruze: I think kids are just so visual so when they’re able to see something happening it clicks faster for them.
That’s why I encourage parents to use cash versus – especially not a credit card – but even a debit card. You want your kids to see you use money and you can kind of explain where it comes from.
They’re just very visual learners and they’re watching everything.
You know, the theme throughout the book was “more is caught than taught” and so they’re watching your every move.
The more you can just explain to them and show them, literally show them what you’re doing the more they’re going to learn.
MintLife: What are the principles that you have added to the book that you might have formed by growing up in the Ramsey household, but have set you apart with your own message for people?
Cruze: Hopefully my message can come in and, number one, kind of be the preventative medicine and help prevent money mistakes.
So hopefully people will say, maybe “Because I heard Rachel Cruze earlier in life I didn’t take out a student loan or I didn’t get the credit card.”
So the preventative side is huge.
But also the side to say, “Hey, it’s okay. You can have a great life. You can enjoy stuff and buy a cute designer bag or whatever it is and still be responsible with money.”
Are there times you’re going to make sacrifices to get ahead? Absolutely. But there’s other times where you can enjoy your things.
MintLife: Once you go through getting on a budget and being responsible with money it’s easy to be hard on yourself when you screw up.
What kind of advice do you give about being forgiving and allowing yourself and your kids to make their own mistakes?
Cruze: I just think you have to go into this process to know you’re never going to be perfect, you just need to be intentional.
I mess up with money still to this day on different things.
I want to go buy something out of the budget and talk to my husband about it and he’s like, “No, it’s not in the budget, Rachel. We didn’t plan for this.”
I mean we still have those conversations even today.
So, it’s definitely a discipline that you have to have.
Over time, I think it gets easier but you’re never going to be perfect.
I think the big thing is avoiding the massive money mistakes that get people in trouble.
The best thing is just making this a habit.
MintLife: It gets hard to keep saying to the kids, “It’s not in the budget. It’s not in the budget,” especially when they see what all their friends do and the things they have.
What do you say to parents who tell you that they feel this pain?
Cruze: When you have to tell your kids “no” a lot it’s actually really a healthy thing because you’re teaching them boundaries.
You’re teaching them limits, that money is finite, that once it’s gone it’s gone.
So you’re saying, “Hey, kids, Mom and Dad are doing the best we can and we’re allocating our money to what’s important and what’s a priority right now. We may make sacrifices now for a future benefit so hopefully in the future we can do some fun stuff.”
But a big thing when they say “so and so has this and so and so has that,” the deeper issue is teaching your kids “don’t let your stuff identify you” because they are growing up in a culture with social media and reality TV where things are being thrown in their face 24/7.
Being able to explain to them and walk them through this process of it’s okay to have nice stuff but don’t let your nice stuff own you, don’t let it have you.
That’s where you can start talking about identity, you can start talking about contentment.
MintLife: In the chapter about contentment Dave Ramsey wrote “Discontentment is a socially accepted drug problem in this culture.”
Can you explain what that means to you and what families can do?
Cruze: It’s a dangerous place to be, this idea of discontentment, if you’re never satisfied with where you are in life.
Contentment is not laziness or lack of ambition – you still teach your kids to go out and win and be ambitious but it is kind of a spiritual exercise to be content.
When you’re discontent it’s overwhelming, it’s addictive to just think that stuff is going to make you happy and it’s really a sad, empty life that a lot of people lead.
That’s how they live. They’re playing that out all over the Internet and TV, so your kids are being faced with it, literally, every day.
It’s probably the hardest for this generation coming up.
They’re probably in one of the most difficult spots, I think, to combat materialism and discontentment because, again, everything’s so accessible and they can have anything when they want it because of iPhones and all the above.
So, it’s teaching them to slow down and have patience to buy things and know that other stuff is not going to fulfill them.
That’s a hard avenue and an uphill climb for a parent for sure.
MintLife: What about the parents who pick up this book and get that horrible sinking feeling when they realize they’ve been doing it all wrong?
Do you hand them The Total Money Makeover or do you start somewhere else?
Cruze: If they said, “I have no idea where to begin,” I think Total Money Makeover would be it because it walks you through all the baby steps and gets you on track.
With parents that I’m meeting that are saying these things, I end it with encouragement always, to tell them no matter how bad you messed up with money I came from a family that filed bankruptcy.
Like literally, the worst of the worst.
So no matter what mistakes you’ve made as a parent your kids are your do-over, they’re your clean slate and you can start this today no matter if you have a million dollars in debt or a million dollars in the bank.
No matter where you are financially you can start today not only changing your own personal finances but also helping your children, and that’s what changes family trees.
Editor’s note: This interview was edited for length.
Kim Tracy Prince is a Los Angeles-based writer who has a husband, two little boys, and an obsession with spreadsheets.